- The Ripple versus SEC case is far from over as new insight into XRP’s security status is coming to life.
- Legal battles featuring Coinbase and Terraform Labs contribute to the uncertainty.
The ongoing legal battle between Ripple Labs Inc. and the Securities and Exchange Commission (SEC) is becoming more complex following reports of Federal Judges dismissing XRP’s non-security status. Concurrently, XRP’s price is now stalling at a $0.60 psychological level.
Federal Judges Dismiss Ripple XRP ‘Non-Security’ Status
As Crypto News Flash had formerly announced, US District Judge Analisa Torres ruled in July 2023 that XRP had a non-security classification on exchanges and a security label for institutional sales. This ruling is now under threat as two federal judges overturned Judge Torres’s application of the Howey Test to XRP.
Notably, Judge Torres’ Ripple Labs’ XRP classification is dependent on the Supreme Court’s Howey test, a legal framework used to determine whether an asset is an investment contract and hence a security under securities regulations. The application of Howey’s test to cryptocurrencies is a contentious issue, with arguments both for and against crypto passing the test.
A reminder to the $XRP community: So far TWO Fed judges including the one considered the “dean” of corporate-law judiciary (Rakoff) have scoffed at arguments using Judge Torres’ @Ripple ruling as precedent because the ruling itself is so incoherent. No one can guarantee the… https://t.co/aOwfZ8ERfF
— Charles Gasparino (@CGasparino) March 31, 2024
In the Ripple vs SEC case, Judge Torres used Howey to separate XRP sales into two groups, an application now under scrutiny by US Federal Judges in lawsuits involving Coinbase and Terraform Labs. Typically, the Howey test consists of four criteria which include an investment of money, expectation of profits, common enterprise, and reliance on the efforts of others.
Charles Gasparino, an American Journalist at Fox Business News expressed dissatisfaction with the use of Howey’s test, citing “incoherence” in its application. He, however, emphasized that while it is still uncertain if Judge Torres’ ruling will be reversed, there are indications that her legal analysis is flawed.
In addition to concerns raised by Gasparino, Stuart Alderoty, Ripple’s Chief Legal Officer, stated that the SEC has influenced the Judge’s decision in the Coinbase lawsuit. He, however, believes the SEC will have difficulty presenting proof to back up its allegations.
XRP Price Stall at $0.6
The price of XRP has fluctuated in the face of these legal challenges. For almost 460 days, XRP has been trading in a narrow range of $0.9380 (July 13, 2023 peak) to $0.4226 (August 14, 2023 low). The development has caused the altcoin’s $0.67 support level to turn into resistance.
As of the latest data from Marketcap, XRP is trading at $0.6124, demonstrating a decrease of 2.6% in the past 24 hours, with its market capitalization pegged at $33.5 billion.
Simultaneously, large crypto holders often referred to as whales have been accumulating XRP at the same time as the price decreases, a trend that might help revert the bearish course eventually.
According to data from the on-chain analytical platform Santiment, whales who own between 10 million and 100 million XRP tokens have recently accumulated 190 million XRP tokens to their holdings between March 27 and April 1.
Reiterating Crypto News Flash’s earlier reports, XRP recently formed a Golden Cross, which crypto analyst Egrag Crypto believes could propel its price to $5.5.
However, the fate of XRP’s price recovery is dependent on external variables, specifically swings in the price of Bitcoin. A fall in the price of Bitcoin might have an impact on altcoins such as XRP, potentially leading to a market slump.
